For employees, negotiating salary can feel like navigating treacherous territory. After all, what if you don’t get what you ask for? What if the employer laughs you out of the room? What if your salary-negotiation skills are so abysmal that you end up losing the job offer altogether?
“It’s such a tricky thing because there are so many faux pas,” says Jeremy Tolley, a Nashville-based member of the Society for Human Resource Management’s Special Expertise Panel.
But don’t fear. If you approach negotiating salary correctly, it’s one of the fastest, most efficient ways to boost your income. So, calm your nerves, take a few deep breaths and learn how to negotiate salary the right way.
When to Negotiate Salary
Experts agree that the best time to negotiate salary is when you’re pursuing a new job.
“Your time to get a raise, and to get more money, is when you’re switching jobs,” says Alexandra Levit, co-author of “Mom.B.A.: Essential Business Advice from One Generation to the Next.” You have more power as someone who’s just been offered a new role than you will as a current employee. Plus, employers expect that you’ll negotiate during the onboarding process, Tolley says. So, failing to negotiate when it’s appropriate likely means leaving money on the table.
If you’re already at your job, don’t abandon your dreams of earning more money. You can try negotiating a pay raise during your annual review or when your job duties change, such as during a promotion. Negotiating salary with your current employer “depends on the company, the [work] cycle and how long you’ve been there,” says Dawn Fay, district president for Robert Half, which staffs workers in the finance, accounting, technology, legal, creative and administrative professions. But, she cautions, be careful not to threaten or use another job offer to force a salary boost. “Those bidding wars tend to backfire,” she says. And an employer may start to question your loyalty to the company.
There are a few situations in which you shouldn’t negotiate salary, including early in the job application process (it’s best to have an offer on the table), or if the employer makes an unusually generous, above-market compensation offer.
Should I Have Another Job Offer Before I Negotiate Salary?
If you’d like to negotiate salary with your current employer, having another job offer is fantastic leverage. But experts warn against inventing a job offer — or applying for a job simply to get an offer. “Your bluff could be called,” says Carla Dearing, CEO of Sum180, an online financial wellness service.
If a new job falls into your lap, that’s great, Dearing says. It’s also acceptable if you’re legitimately interested in the new opportunity but want to give your employer a chance to respond before taking it. But think twice before going through the whole rigmarole, including applying, talking to industry sources and undergoing the interview process, for the sole purpose of asking your current boss for a raise.
How to Determine Your Value as an Employee
Before you get deep into the interview process, you need to know that the job you’re applying to offers a salary in the range you’re seeking. After all, why would you spend hours perfecting your cover letter, resume and responses to interview questions for a gig that pays way less than you’re worth?
There are a few ways to find out what kind of salary your potential future employer offers. If you’re working with a recruiter, ask her about the job’s salary range. If you’re on your own, you may be able to find a salary range in the job posting, by asking the person who referred you or on websites such as Glassdoor and PayScale.
When using salary-reporting sites to do your research, “be circumspect about the data resources because they’re self-reported,” Dearing says.
Dearing recommends getting typical salary information by conducting informational interviews with at least 10 people in your field and market. Ask your source,” What are the categories of jobs in your company, and what level do you think this job I’m apply for is at?” “How would you think about pricing this job?” Getting on-the-ground information from real industry sources should give you a better sense of typical salary and may even score you a referral, Dearing says. Before you hang up, be sure to ask for a recommendation for another resource in the industry with whom you can talk.
If you’re a current employee looking to renegotiate compensation, know your recent wins and contributions to the team, experts say. Make a “brag sheet” or a “one-sheet” detailing your brag-worthy accomplishments.
How to Negotiate Salary
When it comes to bringing up the topic of compensation, job applicants should typically let the employer make the first move, Tolley says. The only time an applicant might want to talk about salary before the employer brings it up is if she is starting to invest lots of time in the interview process without a clear idea of the income range. “At that point,” Tolley says, “the candidate should probably say, “Hey, can we talk about salary to make sure we’re in the same ballpark before everybody makes an investment?'”
If you want to disclose your current salary to justify a higher wage, Tolley suggests bringing it up early, too. “If an applicant truly does not want to accept a compensation level below a certain amount, they may want to reveal that information fairly early in the process,” he says. “However, I recommend that applicants try to keep the conversation focused on the wage range for the specific position.”
The Exact Words to Use When Negotiating Salary
Carefully choose your words when negotiating salary. When responding to a compensation offer, don’t react to the initial amount with a “how dare you offer me such a puny sum!” Replying with an inappropriately rude, out-of-line response is one of the few ways you risk losing the job offer altogether at the salary negotiation stage. Instead, take a moment to evaluate the offer, reply positively and politely, then come back at the hiring manager with a reiteration of your value as a worker and a higher figure.
“Start with some enthusiasm,” Levit says. Then add, “The number I had in mind was more $X because …” and state why you’re worth that amount. Keep in mind that your counteroffer shouldn’t come out of thin air. “You’ve got to come with your facts,” Fay says. Consider calculating your counteroffer based on the market rate in your area and the value you think you bring.
If the company comes back at you with a flat-out no, respond with, “Just to clarify, there’s no wiggle room here?” Sometimes, however, the offer truly is what it is, Levit says. In that situation, you need to decide whether you’re willing to accept the position at that income level. If so, you may want to see if you can arrange to have your first performance or salary review early in order to revisit compensation. Remember, though, at that point, you’ll have committed to the company and will be at more of a disadvantage when it comes to achieving a big salary boost.
Nervous about bringing up salary? Practice your wording and reactions to likely responses to get yourself comfortable with making the request, experts say.
Can an Employer Ask for Your Salary History?
This popular interview question has earned some pushback in recent years, with some advocates saying it exacerbates pay inequality. Various states and municipalities, including California, Massachusetts and New York City, have prohibited employers from asking for salary history. Even if you are applying for a job in a location where the question is legal, however, many job applicants should aim to avoid answering it outright, experts say.
What to Do if an Employer Asks About Salary History
While your previous salary may be a personal factor in what income range you’re looking to achieve, don’t let a future employer use it to calculate your compensation. If asked, respond with a phrase such as “I choose to keep that information confidential, but I am looking for compensation in the $X to $Y range.”
Or candidates can consider another approach. “Very politely, a candidate should just say, ‘I’d prefer to focus on the job responsibilities and my qualifications for the position,'” says Yasmin Sahami, senior manager of talent acquisition at ZipRecruiter.
If you are applying in a locale where that question is illegal and you’re asked it anyway, experts caution against calling out your interviewer or getting defensive. After all, your interviewer may not be a human resources professional or may not know the rule. “Always be diplomatic,” Sahami says.
Other Employee Benefits to Negotiate
While nonsalary forms of compensation may not appear on your radar as clearly as salary, negotiating them can add real value — and cost savings — to your life. “Evaluate the entire package — don’t just be hung up on base salary,” Sahami says.
For example, remote working opportunities may give you the chance to cut back on child care expenses, commuting costs or housing fees. Consider negotiating these benefits instead of — or in addition to — your salary:
— An early salary review. Employers typically review your salary each year. If you can manage an earlier salary review, say, nine months into your new job, then you may be able to repair a lowball offer.
— Remote work or flex time. If being able to work from home or working a nontraditional schedule appeals to you, try negotiating for this benefit. Note that your likelihood of receiving it depends on your role and the company’s workplace culture.
— Professional development opportunities. You may be able to receive reimbursement for professional development courses, which benefits both you and your employer.
— Equipment or tech, such as a company phone or car. Consider asking for additional resources if they will help you perform your job more efficiently. These can be especially useful if you travel frequently.
— Stock options. This can be a valuable benefit to negotiate, but before doing so, take stock of the financial health of your employer.
— Vacation time. Vacation time is sometimes negotiable if you’re seeking additional days off.
Should You Negotiate Salary Over Email or Via Phone?
Negotiating salary is awkward, and it may be tempting to perfect your negotiation request in an email. But experts caution against that strategy, agreeing that salary negotiation is best done face-to-face or over the phone. “If you can’t do it in person, do it on the phone, but actually do it live,” Fay says.
It’s harder for employers to simply say “no” over the phone or in person, and it’s easier for them to stick to the company line in an email, experts say. Practice what you’ll say during the negotiation, get your salary range firmly in mind, be polite, and you’ll be on your way to earning a fatter paycheck.
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Salary Negotiation: How to Negotiate Salary and Succeed originally appeared on usnews.com
Update 07/11/18: This article was originally published on Oct. 4, 2017, and has been updated to include new information.
